By Dean Seal

 

Shares of major U.S. railroad companies moved lower in the first few hours of trading Friday after gaining the day before as investors reacted to news that an agreement had been reached to avoid a potential railway strike.

Norfolk Southern Corp. shares fell 3% to $231.81. Shares of CSX Corp. slipped 3.4% to $29.16, and Union Pacific Corp. shares were down 4% at $209.70.

The White House said Thursday that it had been in negotiations with unions and the rail companies to prevent a shutdown that would have further snarled U.S. supply chains.

Railroad operators had seen their shares drop this week amid rising fears of a potential strike and a wider market downturn, but they shot up in premarket trading Thursday after the tentative agreement was announced.

Shares started to slip throughout Thursday though as analysts weighed in on the tentative deal, with analysts at UBS noting that the agreement still needed to be ratified by union membership.

They continued to trend downward in off-hour trading before opening lower Friday, quickly dipping and then edging lower throughout the first half of the day.

The sector's downturn comes amid a selloff in the wider market, propelled by a plunge in the price of FedEx shares after the delivery giant said it would reduce operations.

 

Write to Dean Seal at dean.seal@wsj.com

 

(END) Dow Jones Newswires

September 16, 2022 13:06 ET (17:06 GMT)

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